Consisted of depreciable fixed assets

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Reference no: EM131825204

As of Jan ‘05, Status Quo total assets were $500k, of which $300k consisted of depreciable fixed assets. Status Quo uses St.-line depreciation, over a period of 10 years. After-tax income has been $26k/year each of the last 10 years. Other assets have not changed.

A) Compute return on assets at year-end for ‘05, ‘07, ‘10, ‘12 & ‘14. (Use $26k in the numerator for each year.)

P-4>To what do you attribute the phenomenon shown in part a?

P-4 C>Now assume income increased by 10 percent each year. What effect would this have on your above answers?

Reference no: EM131825204

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